- Strikes put fragile truce between US and Iran under pressure
- RBA delivers rate hike as expected, focus now on comments
- Yen steady as traders stay cautious after suspected intervention
LONDON/SINGAPORE, May 5 (Reuters) - The U.S. dollar was little changed on Tuesday as markets weighed developments in the Iran war, while the yen steadied in muted trade after suspected intervention by Tokyo last week sparked sharp gains.
The ceasefire in the Middle East was in doubt once more after the U.S. and Iran launched new attacks as they wrestled for control of the Strait of Hormuz amid conflicting reports about ships passing through the strait in recent days.
The dollar index , which measures the U.S. currency against six units, was steady at 98.44 after rising 0.3% on Monday. The euro last fetched $1.1691, while sterling was at $1.3538.
"The market, I think, is very, very aware that the news flow can change very quickly and this could go either way. And I think that's why the market is in this sort of holding pattern," Jane Foley, head of FX strategy at Rabobank, said.
Meanwhile, the Australian dollar drifted lower after the central bank raised interest rates, as expected, for the third straight meeting to tame inflation. It last bought $0.7154, 0.18% lower on the day.
The dollar index , which measures the U.S. currency against six units, was steady at 98.44 after rising 0.3% on Monday. The euro last fetched $1.1691, while sterling was at $1.3538.
"The market, I think, is very, very aware that the news flow can change very quickly and this could go either way. And I think that's why the market is in this sort of holding pattern," Jane Foley, head of FX strategy at Rabobank, said.
Meanwhile, the Australian dollar drifted lower after the central bank raised interest rates, as expected, for the third straight meeting to tame inflation. It last bought $0.7154, 0.18% lower on the day.
The yen's fate is also tied to oil prices and how quickly the war in the Middle East is resolved.
"A lot hinges on oil price," said Vasu Menon, managing director of investment strategy at OCBC. "If it rises or remains elevated, then the yen could come under pressure once again."
Reporting by Sophie Kiderlin in London and Ankur Banerjee in Singapore; Editing by Shri Navaratnam, Jacqueline Wong and Emelia Sithole-Matarise
Source: Reuters